* Leu consolidates around 4.3/eur as IMF visits
* Romania debt tender, Polish cbank minutes due
* Crown rises slightly after cbank vice-gov comments
(Adds bonds, Czech cbanker)
By Jason Hovet
PRAGUE, Oct 21 (Reuters) - Emerging European currencies
edged up along with equities on Thursday, with the exception of
the Romanian leu which hovered near a 3-1/2 month low on
uncertainty over the government's IMF-mandated austerity drive.
Bargain hunters moved into central European stocks, which
had lost ground for much of this week. Shares in central
Europe's largest-listed company, Czech power group CEZ
<>, gained 1 percent after hitting 1-1/2 year lows
earlier.
The rise in equities gave a boost to currencies that have
been pressured by persistent worries about the budget plans of
Romania and Hungary.
The leu dipped to its lowest level since July 2 this week
after the leftist opposition announced a parliamentary vote of
no-confidence against the fragile government.
On Wednesday, parliament approved a proposal from the
leftist opposition to cut VAT for basic foodstuffs to 5 percent
from 24 percent, a move that could complicate a visiting IMF
team's review of the country's 20-billion-euro bailout.
The leu <EURRON=> lost 0.1 percent to bid at 4.312 to the
euro by 0929 GMT, while the Hungarian forint <EURHUF=>
rebounded, rising 0.6 percent to 274.59.
"We see consolidation (for the leu) around 4.3 unless
something bad, like a government collapse, happens," said one
dealer in Bucharest.
Government officials said the VAT cut was not supported by
the ruling coalition and some deputies had backed it by mistake.
The governing Democrat Liberal party would try and prevent its
passage into law or have it revoked. []
The finance ministry plans to sell 300 million lei of
five-year treasury bonds on Thursday. Analysts said that, if it
is successful, next Wednesday's no-confidence vote could force
debt managers to reduce maturities if they wanted to stick to
their strategy of capping yields at 7 percent.
POLISH CBANK MINUTES
The Polish zloty <EURPLN=> added 0.2 percent to hold around
3.95 before the release of minutes from the central bank's last
meeting, due at around 1200 GMT.
The minutes should give clues on how willing the bank would
be to raise interest rates. A Reuters poll forecasts the bank
will raise rates by 25 basis points by the end of the year,
though they are split over the timing of a hike.
The Czech crown <EURCZK=>, often seen as a safe haven trade
within the region, was up a touch on the strong side of the
24.50 per euro level it has traded around this month.
It rose after Czech central bank vice-governor Mojmir Hampl
said on Thursday he did not believe monetary policy conditions
had changed significantly since the bank's Sept. 23 interest
rate meeting that left rates on hold at record lows.
Some analysts see a chance of a rate hike by the end of the
year but most do not expect one until 2011 as the economy gains
traction and a strengthening crown helps tame inflationary
pressures.
"They are limited with rate hikes by EUR/CZK," a Prague
dealer said.
Vice-governor Hampl told reporters he saw no need to comment
on the crown, which has gained more than 7.4 percent this year
compared to a 3.7 percent rise in the zloty.
--------------------------MARKET SNAPSHOT--------------------
Currency Latest Previous Local Local
close currency currency
change change
today in 2010
Czech crown <EURCZK=> 24.492 24.511 +0.08% +7.46%
Polish zloty <EURPLN=> 3.95 3.959 +0.23% +3.9%
Hungarian forint <EURHUF=> 274.59 276.23 +0.6% -1.54%
Croatian kuna <EURHRK=> 7.337 7.33 -0.1% -0.38%
Romanian leu <EURRON=> 4.311 4.307 -0.09% -1.71%
Serbian dinar <EURRSD=> 106.08 106.00 -0.08% -9.62%
Yield Spreads
Czech treasury bonds <0#CZBMK=>
2-yr T-bond CZ2YT=RR -3 basis points to 78bps over bmk*
7-yr T-bond CZ7YT=RR -13 basis points to +73bps over bmk*
10-yr T-bond CZ9YT=RR -8 basis points to +96bps over bmk*
Polish treasury bonds <0#PLBMK=>
2-yr T-bond PL2YT=RR +1 basis points to +376bps over bmk*
5-yr T-bond PL5YT=RR -8 basis points to +349bps over bmk*
10-yr T-bond PL10YT=RR -1 basis points to +313bps over bmk*
Hungarian treasury bonds <0#HUBMK=>
3-yr T-bond HU3YT=RR -1 basis points to +543bps over bmk*
5-yr T-bond HU5YT=RR -8 basis points to +514bps over bmk*
10-yr T-bond HU10YT=RR 0 basis points to +465bps over bmk*
*Benchmark is German bond equivalent.
All data taken from Reuters at 1130 CET.
Currency percent change calculated from the daily domestic
close at 1600 GMT.
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(Reporting by Reuters bureaus, writing by Jason Hovet;
Editing by John Stonestreet and Susan Fenton)
